U.S. Charges 11 in Russian Military Exports Ring

Oct. 3, 2012 - 12:57PM
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NEW YORK — The United States announced criminal charges Oct. 3 against 11 members of an alleged ring illegally exporting $50 million worth of high-tech military electronics to Russia under the guise of civilian deals.

“The microelectronics allegedly exported to Russia are subject to strict government controls due to their potential use in a wide range of military systems, including radar and surveillance systems, weapons guidance systems, and detonation triggers,” the federal prosecutor’s office in Brooklyn, N.Y., said.

The alleged scheme ran between 2008 and the present, with defendants posing as civilian manufacturers. A Texas-based company called Arc Electronics, owned by Russian-American defendant Alexander Fishenko, allegedly told U.S. suppliers that it made traffic lights.

In reality, the defendants were procuring high-tech products that are rare in Russia on behalf of the Russian military, prosecutors alleged. In addition being charged under military export laws, Fishenko is accused of being “an unregistered agent of the Russian government.”

To mask their activity, the perpetrators allegedly altered documents and websites to remove military references.

Another Russian-American working for Arc, Alexander Posobilov, allegedly told a Russian procurement company to make sure the end use export certificate read, “fishing boats, and not fishing/anti-submarine ones. ... Then we’ll be able to start working.”

Arc and a Russian company, Apex, are charged in addition to 11 people. The corporate defendants face large fines if found guilty, while the individual defendants face multiple prison sentences.

It was not immediately clear how many of the 11 had been arrested. Search warrants were executed Oct. 3 at seven residences and businesses, officials said, and five bank accounts were seized.

In addition, the Department of Commerce put 165 foreign individuals and companies on its Entity List, which places restrictions on their abilities to export from the United States and can amount to a blacklist.

The scheme was described by prosecutors as “a surreptitious and systematic conspiracy to obtain advanced, technologically cutting-edge microelectronics.

The microelectronics are typically used “in a wide range of military systems, including radar and surveillance systems, missile guidance systems and detonation triggers. Russia does not produce many of these sophisticated goods domestically,” the prosecutor’s office said.